There is a huge challenge to trace the origin of our food supply today. Food supply chain is amongst the most complex of all supply chains.
The food producers and the whole supply chain are so fragmented, and it is incredibly difficult to identify and track, resulting in issues such as fraud, slavery, counterfeiting, and ethic violations, etc. These issues are not only triggering financial cost of fraud, slavery, inefficiencies such as recalls of unsafe food, they fundamentally violate the core of humanity.
Today, we do trace and control the food supply chain, with limited traceability and control with fragmented sources both online and offline from relevant authorities and NGOs.
However, that traceability is likely plagued by foul play and fraud. Immutability is of utmost importance as there are countless stakeholders involved in the trillion-dollar worth of the global food industry, which bound to have slippage in data integrity or simply unethical parties that manipulate data or commit fraud for personal gain.
Blockchain technology will be useful in this use case where data cannot be manipulated; the supply chain can be traced securely; reduce the operational cost, and create trust.
Is this a feasible use case for blockchain?
There are a few key design considerations on the protocol, network, and application layer
Protocol layer
A public blockchain enables anyone to be part of the validation process, prevents anyone to take control of the system, and only those running the nodes would be able to make changes.
As such public institutions would not be able to control any of the ledgers. However, this poses certain risks such as uncovered loss of digital assets, and IDs which can be potentially addressed by assigning a custodian with private keys.
Such centralized system does not completely issue free as it is vulnerable to hackers and collusion. For scalability, the public blockchain does have its limitations in terms of throughput and speed.There are protocols such as Ethereum, which their contracts are not run on the blockchain, but they are confirmed in the blockchain.
In other words, the verifications are embedded in the blockchain, but the entire applications are run on different blockchains. Such as having a plasma operator (a centralized block issuer) to keep the blockchain running correctly because the operator has a significant financial incentive at stake.
The operator will place a security deposit on the Ethereum blockchain, which is served as a warranty. In the event the operator fails to comply, half of the deposit will go to the challenger who detects the problem.
This design still reinforces a trust-less environment, and all transactions are validated on the root chain through automated processes, without the need for human intervention and are supported by the biggest developer community of Ethereum.
Network layer
To enable trust in the solution, it is important to have multiple nodes outside of the institutions to control the hash tree. This makes it significantly more difficult for the institutions to collude and make changes that would not be visible to others.
There are a few main platforms that need to be integrated to provide the end-to-end solution, such as user interface for all stakeholders, files and data storage, application for tracking and recording, ID registry and verification, and blockchain verifications.
There are limitations on the storage capacity of public blockchains, hence it is recommended to run low security required transactions outside of the public blockchain to increase the throughput and reduce the cost.
Those transactions could be run in a proof of stake manner where the centralized nodes are incentivized to behave and there should be a check and balance to prevent fraud.
Application layer
There are user interfaces on the application layer which cater to different stakeholders in the ecosystem. The consumer should be able to use their mobile device to scan a barcode or QR code to access all the information related to the food item instead of having to read the labels on the packaging that is limited with information and less trusted.
They should also be able to report any issues found on the food with the app.
Professional users such as farmers, manufacturers, wholesalers, transporters, and authorities should have an interface that is integrated with the biometric system to hold individuals liable for bad behaviors and also to prevent slavery.
The smart contract administrators that are trusted to do validation would have visibility to the open-source contract codes and incentivized to validate, report and challenge the integrity of every transaction.